EX-99Q1(E): COPIES OF ANY NEW OR AMENDED REGISTRANT INVESTMENT ADVISORY
CONTRACTS
AMENDED AND RESTATED INVESTMENT ADVISORY AND ANCILLARY
SERVICES AGREEMENT
AGREEMENT between NORTHERN FUNDS, a Delaware business trust (the
"Trust"), and NORTHERN TRUST GLOBAL INVESTMENTS LTD. ("NTGIL") (on behalf of the
Global Fixed Income and International Growth Equity Funds) and NORTHERN TRUST
INVESTMENTS, N.A. ("NTI," together with NTGIL the "Advisers"), each a wholly
owned subsidiary of THE NORTHERN TRUST COMPANY.
WITNESSETH:
WHEREAS, the Trust is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Trust is authorized to issue shares of beneficial
interest ("Shares") in separate series with each such series representing the
interests in a separate portfolio of securities and other assets; and
WHEREAS, the Trust presently offers Shares in portfolios, each of
which are listed on Appendix A, which may be amended from time to time, (such
funds, the "Current Funds," together with all other funds subsequently
established by the Trust and made subject to this Agreement being herein
collectively referred to as the "Funds"); and
WHEREAS, the Trust desires to retain NTI, jointly with NTGIL with
respect to the Global Fixed Income and International Growth Equity Funds, to
render investment advisory and ancillary services to the Trust and each of its
Funds as indicated below and the Advisers are willing to so render such
services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter set forth, the parties hereto agree as follows:
1. Appointment of Advisers.
(a) The Trust hereby appoints NTI jointly with NTGIL with
respect to the Global Fixed Income and International Growth
Equity Funds, to act as investment advisers, to the Trust
and the Trust hereby appoints NTI to act as investment
adviser to each of its other Current Funds, for the periods
and on the terms herein set forth. The Advisers accept such
appointments and agree to render the services herein set
forth, for the compensation herein provided.
(b) In the event that the Trust establishes one or more
portfolios other than the Current Funds with respect to
which it desires to retain one or more of the Advisers to
act as investment adviser hereunder, it shall notify the
Advisers in writing. If the Advisers are willing to render
such services under this Agreement it shall notify the Trust
in writing whereupon such portfolio shall become a Fund
hereunder and shall be subject to the provisions of this
Agreement to the same extent as the Current Funds except to
the extent that said provisions (including those relating to
the compensation payable by the Trust to the Advisers) are
modified with respect to such Fund in writing by the Trust
and the Advisers at the time.
(c) At its discretion, the Advisers may provide advisory
services under this Agreement through their own employees or
the employees of one or more affiliated companies that are
qualified to act as investment adviser to the Trust under
applicable law and either control, are controlled by or are
under control with the Advisers, provided that: (i) all
persons, when providing services hereunder, are functioning
as part of an organized group of persons; and (ii) such
organized group of persons is managed at all times by the
Advisers' authorized officers. In addition, the Advisers may
engage one or more investment advisers that are either
registered as such or specifically exempt from registration
under the Investment Advisers Act of 1940, as amended, to
act as sub-advisers or co-advisers to provide with respect
to any Fund any or all of the services set forth in this
Agreement, all as shall be set forth in a written contract
approved to the extent and in the manner required by the
1940 Act and interpretations thereof by the Securities and
Exchange Commission (the "Commission") and its staff.
2. Delivery of Documents. The Trust has delivered (or will deliver as soon
as is possible) to the Advisers copies of each of the following documents:
(c) Agreement and Declaration of Trust dated as of February 7,
2000 (such Agreement and Declaration of Trust, as presently
in effect and amended from time to time, is herein called
the "Trust Agreement"), copies of which are on file with the
Trust;
(d) By-Laws of the Trust (such By-Laws, as presently in effect
and as amended from time to time, are herein called the
"By-Laws");
(e) Co-Administration Agreement between the Trust and its
Co-Administrators;
(f) Distribution Agreement and Foreign Custody Agreement between
the Trust and its Distributor;
(g) Custodian Agreement and Foreign Custody Agreement between
the Trust and its Custodian;
(h) Transfer Agency Agreement between the Trust and its Transfer
Agent;
(i) Prospectuses and Statements of Additional Information for
each of the Current Funds (such Prospectuses and Statements
of Additional Information, as presently in effect and as
amended, supplemented and/or superseded from time to time,
are herein called "Prospectus" and "Statement of Additional
Information," respectively);
(j) All Post Effective Amendments to the Trust's Registration
Statement on Form N-1A (No. 33-73404) under the Securities
Act of 1933 (the "1933 Act") and all Amendments to the
Trust's Registration Statement on such form (No. 811-8236)
under the 1940 Act, filed with the Commission to date (such
Registration Statement, as presently in effect and as
amended from time to time, is herein called the
"Registration Statement").
The Trust agrees to promptly furnish the Advisers from time to time with
copies of all amendments of or supplements to or otherwise current versions of
any of the foregoing documents not heretofore furnished.
3. Duties of Advisers.
(a) Subject to the general supervision of the Trustees of the
Trust, NTI shall manage the investment operations of each of
the Funds, jointly with NTGIL with respect to the Global
Fixed Income and International Growth Equity Funds, and the
composition of each Fund's assets, including the purchase,
retention and disposition thereof. In this regard, the
Advisers:
(i) shall provide supervision of the Funds' assets,
furnish a continuous investment program for such
Funds, determine from time to time what
investments or securities will be purchased,
retained or sold by the Funds, and what portion of
the assets will be invested or held uninvested as
cash;
(ii) shall place orders pursuant to its determinations
either directly with the issuer or with any broker
and/or dealer or other person who deals in the
securities in which the Fund in question is
trading. With respect to common and preferred
stocks, in executing portfolio transactions and
selecting brokers or dealers, the Advisers shall
use their best judgment to obtain the best overall
terms available. In assessing the best overall
terms available for any transaction, the Advisers
shall consider all factors they deem relevant,
including the breadth of the market in the
security, the price of the security, the financial
condition and execution capability of the broker
or dealer, and the reasonableness of the
commission, if any, both for the specific
transaction and on a continuing basis. In
evaluating the best overall terms available and in
selecting the broker or dealer to execute a
particular transaction, the Advisers may also
consider the brokerage and research services (as
those terms are defined in
Section 28(e) of the Securities Exchange Act of
1934) provided to any Fund and/or other account
over which the Advisers and/or an affiliate of the
Advisers exercises investment discretion. With
respect to securities other than common and
preferred stocks, in placing orders with brokers,
dealers or other persons the Advisers shall
attempt to obtain the best net price and execution
of its orders, provided that to the extent the
execution and price available from more than one
broker, dealer or other such person are believed
to be comparable, the Advisers may, at their
discretion but subject to applicable law, select
the executing broker, dealer or such other person
on the basis of the Advisers' opinion of the
reliability and quality of such broker, dealer or
such other person; and
(iii) may, on occasions when it deems the purchase or
sale of a security to be in the best interests of
a Fund as well as other fiduciary or agency
accounts managed by the Advisers, aggregate, to
the extent permitted by applicable laws and
regulations, the securities to be sold or
purchased in order to obtain the best overall
terms available execution with respect to common
and preferred stocks and the best net price and
execution with respect to other securities. In
such event, allocation of the securities so
purchased or sold, as well as the expenses
incurred in the transaction, will be made by the
Advisers in the manner it considers to be most
equitable and consistent with its fiduciary
obligations to such Fund and to such other
accounts.
(b) In addition, the Advisers shall provide the following
ancillary services under this Agreement:
(i) review the preparation of reports and proxy
statements to the Trust's shareholders, the
periodic updating of the Trust's Prospectus,
Statement of Additional Information and
Registration Statement, and the preparation of
other reports and documents required to be filed
by the Trust with the Securities and Exchange
Commission;
(ii) in connection with its management of the Funds,
monitor anticipated purchases and redemptions by
shareholders and new investors;
(iii) provide information and assistance as requested
by the Administrator of the Trust in connection
with the registration of the Trust's shares in
accordance with state and foreign securities
requirements;
(iv) provide assistance as requested by the Trust or
its Administrator concerning the regulatory
requirements applicable to investors that invest
in the Trust;
(v) develop and monitor investor programs for
shareholders of the Trust, and assist in the
coordination of such programs with programs
offered separately by the Adviser to its clients;
(vi) provide assistance in connection with the
operations of the Trust generally; and
(vii) provide other similar services as reasonably
requested from time to time by the Board of
Trustees of the Trust.
(c) Each Adviser, in connection with its rights and duties with
respect to the Trust:
(i) shall use the care, skill, prudence and diligence
under the circumstances then prevailing that a
prudent person acting in a like capacity and
familiar with such matters would use in the
conduct of an enterprise of a like character and
with like aims; and
(ii) shall act in conformity with the Trust Agreement,
By-Laws, Registration Statement, Prospectus and
Statement of Additional Information, and
instructions and the directions of the Trustees of
the Trust, and will use its best efforts to comply
with and conform to the requirements of the 1940
Act and all other applicable federal and state
laws, regulations and rulings.
(d) Each Adviser shall:
(i) comply with all applicable Rules and Regulations
of the Commission and will in addition conduct its
activities under this Agreement in accordance with
other applicable law; and
(ii) maintain a policy and practice of conducting its
investment advisory services hereunder
independently of its commercial banking operations
and those of any affiliated bank of the Advisers.
When the Advisers make investment recommendations
for a Fund, their investment advisory personnel
will not inquire or take into consideration
whether the issuer of securities proposed for
purchase or sale for the Fund's account are
customers of its commercial banking department (if
any) or the commercial banking department of any
affiliated bank of the Advisers.
(e) No Adviser shall unless permitted by the Commission:
(i) permit the Funds to execute transactions with the
Advisers' Bond Department; or
(ii) permit the Funds to purchase certificates of
deposit of the Advisers or their affiliate banks,
commercial paper issued by the Advisers' parent
holding company or other securities issued or
guaranteed by the Advisers, their parent holding
company or their subsidiaries or affiliates.
(f) The Advisers shall render to the Trustees of the Trust such
periodic and special reports as the Trustees may reasonably
request.
(g) The services of the Advisers hereunder are not deemed
exclusive and the Advisers shall be free to render similar
services to others (including other investment companies) so
long as its services under this Agreement are not impaired
thereby.
4. Expenses. During the term of this Agreement, each Adviser shall pay all
costs incurred by it in connection with the performance of its duties under
paragraph 3 hereof, other than the cost (including taxes, brokerage commissions
and other transaction costs, if any) of securities purchased or sold for a Fund.
5. Compensation.
(a) For the services provided and the expenses assumed by the
Advisers pursuant to this Agreement, the Trust shall pay to
the Advisers as full compensation therefor a fee at the
annual rate as set forth in Appendix A.
(b) The fee will be computed based on net assets on each day and
will be paid to the Advisers monthly.
6. Books and Records. Each Adviser agrees to maintain, and preserve for the
periods prescribed by Rule 31a-2 of the Commission under the 1940 Act, such
records as are required to be maintained by Rule 31a-1 of the Commission under
the 1940 Act (other than clause (b) (4) and paragraphs (c), (d) and (e)
thereof). Each Adviser further agrees that all records which it maintains for
the Trust are the property of the Trust and it shall surrender promptly to the
Trust any of such records upon the Trust's request.
7. Indemnification.
(a) The Trust hereby agrees to indemnify and hold harmless the
Advisers, their directors, officers, and employees and each
person, if any, who controls the Advisers (collectively, the
"Indemnified Parties") against any and all losses, claims,
damages or liabilities, joint or several, to which they or
any of them may become subject under the 1933 Act, the
Securities Exchange Act of 1934, the 1940 Act or other
federal or state statutory law or regulation, at common law
or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or
are based upon:
(i) any untrue statement or alleged untrue statement
of a material fact or any omission or alleged
omission to state a material fact required to be
stated or necessary to make the statements made
not misleading in the Registration Statement, the
Prospectus, the Statement of Additional
Information, or any application or other document
filed in connection with the qualification of the
Trust or Shares of the Trust under the Blue Sky or
securities laws of any jurisdiction
("Application"), except insofar as such losses,
claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon
any such untrue statement or omission or alleged
untrue statement or omission either pertaining to
a breach of the Advisers' duties in connection
with this Agreement or made in reliance upon and
in conformity with information furnished by,
through or on behalf of the Adviser for use in
connection with the Registration Statement, any
Application, the Prospectus or the Statement of
Additional Information; or
(ii) subject to clause (i) above, the Advisers acting
in accordance with the terms hereof;
and the Trust will reimburse each Indemnified Party for any
legal or other expense incurred by such Indemnified Party in
connection
with investigating or defending any such loss, claim,
damages, liability or action.
(b) If the indemnification provided for in paragraph 7(a) is due
in accordance with the terms of such paragraph but is for
any reason held by a court to be unavailable from the Trust,
then the Trust shall contribute to the aggregate amount paid
or payable by the Trust and the Indemnified Parties as a
result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is
appropriate to reflect (i) the relative benefits received by
the Trust and such Indemnified Parties in connection with
the operation of the Trust, (ii) the relative fault of the
Trust and such Indemnified Parties, and (iii) any other
relevant equitable considerations. The Trust and the
Advisers agree that it would not be just and equitable if
contribution pursuant to this subparagraph (b) were
determined by pro rata allocation or other method of
allocation which does not take account of the equitable
considerations referred to above in this subparagraph (b).
The amount paid or payable as a result of the losses,
claims, damages or liabilities (or actions in respect
thereof) referred to above in this subparagraph (b) shall be
deemed to include any legal or other expense incurred by the
Trust and the Indemnified Parties in connection with
investigating or defending any such loss, claim, damage,
liability or action. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of
the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent
misrepresentation.
(c) It is understood, however, that nothing in this paragraph 7
shall protect any Indemnified Party against, or entitle any
Indemnified Party to indemnification against, or
contribution with respect to, any liability to the Trust or
its Shareholders to which such Indemnified Party is subject,
by reason of its willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of
a reckless disregard to its obligations and duties, under
this Agreement or otherwise, to an extent or in a manner
inconsistent with Section 17 of the 1940 Act.
8. Duration and Termination. Insofar as the holders of Shares representing
the interests in the Current Funds are affected by this Agreement, it shall
continue, unless sooner terminated as provided herein, until June 30, 2008, and,
insofar as the holders of Shares representing the interests in each of the other
Funds are affected by this Agreement, it (as supplemented by the terms specified
in any notice and agreement pursuant to paragraph 1(b) hereof) shall continue
(assuming approval by the initial holder(s) of Shares of such Fund) until June
30 of the year following the year in which the Fund becomes a Fund hereunder,
and with respect to each Fund thereafter shall continue automatically for
periods of one year so long as each such latter continuance is approved at least
annually (a) by the vote of a majority of the
Trustees of the Trust who are not parties to this Agreement or interested
persons (as defined by the 1940 Act) of any such party, cast in person at a
meeting called for the purpose of voting on such approval, and (b) by the
Trustees of the Trust or by a vote of a majority of the outstanding Shares (as
defined with respect to voting securities in the 1940 Act) representing the
interests in such Fund; provided, however, that this Agreement may be terminated
by the Trust as to any Fund at any time, without the payment of any penalty, by
vote of a majority of the Trustees of the Trust or by vote of a majority of the
outstanding Shares (as so defined) representing the interests in the Fund
affected thereby on 60 days' written notice to the Advisers at any time, or by
the Advisers at any time, without payment of any penalty, on 60 days' written
notice to the Trust. The requirement that this Agreement be "approved at least
annually" shall be construed in a manner consistent with the 1940 Act and the
rules and regulations thereunder. This Agreement shall automatically and
immediately terminate in the event of its assignment (as defined by the 1940
Act)."
9. Name of the Trust. The Advisers agree that the name "Northern" may be
used in the name of the Trust and that such name, any related logos and any
service marks containing the word "Northern" may be used in connection with the
Trust's business only for so long as this Agreement (including any continuance
or amendment hereof) remains in effect and that such use shall be royalty free.
At such time as this Agreement shall no longer be in effect, the Trust will
cease such use. The Trust acknowledges that it has no rights to the name
"Northern," such logos or service marks other than those granted in this
paragraph and that the Advisers reserve to themselves the right to grant the
nonexclusive right to use the name "Northern," such logos or service marks to
any other person, including, but not limited to, another investment company.
10. Status of Advisers as Independent Contractors. Each Adviser shall for
all purposes herein be deemed to be an independent contractor and shall, unless
otherwise expressly provided herein or authorized by the Trustees of the Trust
from time to time, have no authority to act for or represent the Trust in any
way or otherwise be deemed an agent of the Trust.
11. Amendment of Agreement. This Agreement may be amended by mutual consent
of the parties, and the consent of the Trust must be approved by vote of a
majority of those Trustees of the Trust who are not parties to this Agreement or
interested persons (as defined in the 1940 Act) of any such party, cast in
person at a meeting called for the purpose of voting on such amendment, and, to
the extent required by the 1940 Act and interpretations thereof by the
Commission and its staff, by vote of a majority of the outstanding Shares (as
defined with respect to voting securities by the 1940 Act) representing the
interests in each Fund affected by such amendment.
12. Shareholder Liability. This Agreement is executed by or on behalf of
the Trust with respect to each of the Funds and the obligations hereunder are
not binding upon any of the Trustees, officers or Shareholders of the Trust
individually but are binding only upon the Trust and its assets and property.
All obligations of the Trust under this Agreement shall apply only on a
Fund-by-Fund basis, and the assets of one Fund shall not be liable for the
obligations of another Fund.
13. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected
thereby. This Agreement shall be construed in accordance with applicable federal
law and (except as to paragraph 12 hereof which shall be construed in accordance
with the laws of the State of Delaware) the laws of the State of Illinois and
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors (subject to the last sentence of paragraph 8) and,
to the extent provided in paragraph 7 hereof, each Indemnified Party. Anything
herein to the contrary notwithstanding, this Agreement shall not be construed to
require, or to impose any duty upon, either of the parties to do anything in
violation of any applicable laws or regulations. Any provision in this Agreement
requiring compliance with any statute or regulation shall mean such statute or
regulation as amended and in effect from time to time.
14. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed as of this 29th day of January, 2008.
NORTHERN FUNDS
/s/ Xxxxx Xxxxxxxx
----------------------------------------
By: Xxxxx Xxxxxxxx
Title: President
NORTHERN TRUST INVESTMENTS, N.A.
/s/ Xxxx X. Xxxxxxxxxx
----------------------------------------
By: Xxxx X. Xxxxxxxxxx
Title: Senior Vice President
NORTHERN TRUST GLOBAL INVESTMENTS LTD.
(WITH RESPECT TO THE GLOBAL FIXED INCOME
AND INTERNATIONAL GROWTH EQUITY FUNDS
ONLY)
/s/ Xxxx X. Xxxxxxx
----------------------------------------
By: Xxxx X. Xxxxxxx
Title: Senior Vice President
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed as of the 15th of November, 2007 with regard to the Northern Funds
Global Sustainability Index Fund.
NORTHERN FUNDS
/s/ Xxxxx Xxxxxxxx
----------------------------------------
By: Xxxxx Xxxxxxxx
Title: President
NORTHERN TRUST INVESTMENTS, N.A.
/s/ Xxxx X. Xxxxxxxxxx
----------------------------------------
By: Xxxx X. Xxxxxxxxxx
Title: Senior Vice President
EXHIBIT A
Pursuant to Section 5 of this Agreement, the Trust shall pay to the
Advisers a fee at the annual rate calculated as a percentage of each Current
Portfolio's assets as set forth below:
FUND FEE RATE (%)
---- ------------
Arizona Tax-Exempt Fund 0.55
Bond Index Fund 0.15
California Intermediate Tax-Exempt Fund 0.55
California Municipal Money Market Fund 0.40
California Tax-Exempt Fund 0.55
Emerging Markets Equity Fund 0.35
Enhanced Large Cap Fund 0.30
Fixed Income Fund 0.70
Global Fixed Income Fund 0.85
Global Real Estate Index Fund 0.35
Global Sustainability Index Fund 0.35
Growth Equity Fund 0.85
High Yield Fixed Income Fund 0.70
High Yield Municipal Fund 0.65
Income Equity Fund 0.85
Intermediate Tax-Exempt Fund 0.55
International Equity Index Fund 0.25
International Growth Equity Fund 1.00
Large Cap Value Fund 0.85
Mid Cap Growth Fund 0.85
Mid Cap Index Fund 0.20
Money Market Fund 0.40
Municipal Money Market Fund 0.40
Select Equity Fund 0.85
Short-Intermediate Tax-Exempt 0.50
Short-Intermediate U.S. Government Fund 0.70
Small Cap Growth Fund 1.00
Small Cap Index Fund 0.20
Small Cap Value Fund 0.85
Stock Index Fund 0.10
Tax-Exempt Fund 0.55
Technology Fund 1.00
U.S. Government Fund 0.70
U.S. Government Money Market Fund 0.40
U.S. Government Select Money Market Fund 0.40
NORTHERN FUNDS
SUB-ADVISORY AGREEMENT
MULTI-MANAGER SMALL CAP FUND
Sub-Advisory Agreement (this "Agreement") entered into as of the 16th
day of November 2007, by and among Northern Trust Investments, N.A. and Northern
Trust Global Advisors, Inc. (together, the "Advisers"), and Copper Rock Capital
Partners, LLC, a Delaware Limited Liability Company (the "Sub-Adviser").
WHEREAS, the Advisers have entered into an Investment Advisory and
Ancillary Services Agreement dated May 5, 2006, as amended by Addendum No. 1
dated August 3, 2007 (the "Advisory Agreement") with Northern Funds (the
"Trust"), relating to the provision of portfolio management and administrative
services to the Multi-Manager Small Cap Fund (the "Fund");
WHEREAS, the Advisory Agreement provides that the Advisers may
delegate any or all of their portfolio management responsibilities under the
Advisory Agreement to one or more sub-advisers;
WHEREAS, the Advisers and the Trustees of the Trust desire to retain
the Sub-Adviser to render portfolio management services to the Fund in the
manner and on the terms set forth in this Agreement, and the Sub-Adviser is
willing to provide such services.
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter set forth, the parties hereto agree as follows:
1. Sub-Advisory Services.
(a) The Advisers hereby appoint the Sub-Adviser to act as an
investment adviser to the Fund for the periods and on the
terms herein set forth. The Sub-Adviser accepts such
appointment and agrees to render the services herein set
forth, for the compensation herein provided.
(b) The Sub-Adviser shall, subject to the supervision and
oversight of the Advisers, manage the investment and
reinvestment of such portion of the assets of the Fund, as
the Advisers may from time to time allocate to the
Sub-Adviser for management (the "Sub-Advised Assets"). The
Sub-Adviser shall manage the Sub-Advised Assets in
conformity with (i) the investment objective, policies and
restrictions of the Fund set forth in the Trust's prospectus
and statement of additional information relating to the
Fund, as they may be amended from time to time and provided
to Sub-Adviser, any additional policies or guidelines,
including
without limitation compliance policies and procedures,
established by the Advisers, the Trust's Chief Compliance
Officer, or by the Trust's Board of Trustees ("Board") that
have been furnished in writing to the Sub-Adviser, (ii) the
asset diversification tests applicable to regulated
investment companies pursuant to section 851(b)(3) of the
Internal Revenue Code, (iii) the written instructions and
directions received from the Advisers and the Trust as
delivered in writing to Sub-Adviser; and (iv) the
requirements of the Investment Company Act of 1940 (the
"1940 Act"), the Investment Advisers Act of 1940 ("Advisers
Act"), and all other federal and state laws applicable to
registered investment companies and the Sub-Adviser's duties
under this Agreement, all as may be in effect from time to
time. The foregoing are referred to below together as the
"Policies."
For purposes of compliance with the Policies, the
Sub-Adviser shall be entitled to treat the Sub-Advised
Assets as though the Sub-Advised Assets constituted the
entire Fund, and the Sub-Adviser shall not be responsible in
any way for the compliance of any assets of the Fund, other
than the Sub-Advised Assets, with the Policies. Subject to
the foregoing, the Sub-Adviser is authorized, in its
discretion and without prior consultation with the Advisers,
to buy, sell, lend and otherwise trade in any stocks, bonds
and other securities and investment instruments on behalf of
the Fund, without regard to the length of time the
securities have been held and the resulting rate of
portfolio turnover or any tax considerations; and the
majority or the whole of the Sub-Advised Assets may be
invested in such proportions of stocks, bonds, other
securities or investment instruments, or cash, as the
Sub-Adviser shall determine. Notwithstanding the foregoing
provisions of this Section 1(b), however, (i) the
Sub-Adviser shall, upon and in accordance with written
instructions from either of the Advisers, effect such
portfolio transactions for the Sub-Advised Assets as the
Adviser shall determine are necessary in order for the Fund
to comply with the Policies, and (ii) upon notice to the
Sub-Adviser, the Advisers may effect in-kind redemptions
with shareholders of the Fund with securities included
within the Sub-Advised Assets.
(c) Absent instructions from the Advisers or the officers of the
Trust to the contrary, the Sub-Adviser shall place orders
pursuant to its determinations either directly with the
issuer or with any broker and/or dealer or other person who
deals in the securities in which the Fund is trading. With
respect to common and preferred stocks, in executing
portfolio transactions and selecting brokers or dealers, the
Sub-Adviser shall use its best judgment to obtain the best
overall terms available. In assessing the best overall terms
available for any transaction, the Sub-Adviser shall
consider all
factors it deems relevant, including the breadth of the
market in the security, the price of the security, the
financial condition and execution capability of the broker
or dealer, and the reasonableness of the commission, if any,
both for the specific transaction and on a continuing basis.
In evaluating the best overall terms available and in
selecting the broker or dealer to execute a particular
transaction, the Sub-Adviser may also consider the brokerage
and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934) provided to
the Fund and/or other account over which the Sub-Adviser
and/or an affiliate of the Sub-Adviser exercises investment
discretion. With respect to securities other than common and
preferred stocks, in placing orders with brokers, dealers or
other persons, the Sub-Adviser shall attempt to obtain the
best net price and execution of its orders, provided that to
the extent the execution and price available from more than
one broker, dealer or other such person are believed to be
comparable, the Sub-Adviser may, at its discretion but
subject to applicable law, select the executing broker,
dealer or such other person on the basis of the
Sub-Adviser's opinion of the reliability and quality of such
broker, dealer or such other person; broker or dealers
selected by the Sub-Adviser for the purchase and sale of
securities or other investment instruments for the
Sub-Advised Assets may include brokers or dealers affiliated
with the Sub-Adviser, provided such orders comply with Rules
17e-1 and 10f-3 under the 1940 Act and the Trust's Rule
17e-1 and Rule 10f-3 Procedures, respectively, in all
respects or any other applicable exemptive rules or orders
applicable to the Sub-Adviser. Notwithstanding the
foregoing, the Sub-Adviser will not effect any transaction
with a broker or dealer that is an "affiliated person" (as
defined under the 1940 Act) of the Sub-Adviser or the
Advisers without the prior approval of the Advisers. The
Advisers shall provide the Sub-Adviser with a list of
brokers or dealers that are affiliated persons of the
Advisers.
(d) The Sub-Adviser acknowledges that the Advisers and the Trust
may rely on Rules 17a-7, 17a-10, 10f-3 and 17e-1 under the
1940 Act, and the Sub-Adviser hereby agrees that it shall
not consult with any other investment adviser to the Trust
with respect to transactions in securities for the
Sub-Advised Assets or any other transactions in the Trust's
assets, other than for the purposes of complying with the
conditions of paragraphs (a) and (b) of Rule 12d3-1 under
the 1940 Act.
(e) The Sub-Adviser has provided the Advisers with a true and
complete copy of its compliance policies and procedures for
compliance with "federal securities laws" (as such term is
defined under Rule 38a-1 of the 1940 Act) and Rule 206(4)-7
of the
Advisers Act (the "Sub-Adviser Compliance Policies"). The
Sub-Adviser's chief compliance officer ("Sub-Adviser CCO")
shall provide to the Trust's Chief Compliance Officer ("
Trust CCO") or his or her delegatee promptly (and in no
event more than 10 business days) the following:
(i) a report of any material changes to the Sub-Adviser
Compliance Policies;
(ii) a report of any "material compliance matters," as
defined by Rule 38a-1 under the 1940 Act, that have
occurred in connection with the Sub-Adviser Compliance
Policies;
(iii) a copy of the Sub-Adviser CCO's report with respect to
the annual review of the Sub-Adviser Compliance
Policies pursuant to Rule 206(4)-7 under the Advisers
Act; and
(iv) an annual (or more frequently as the Trust CCO may
request) certification regarding the Sub-Adviser's
compliance with Rule 206(4)-7 under the Advisers Act
and Section 38a-1 of the 1940 Act as well as the
foregoing sub-paragraphs (i) - (iii).
(f) The Sub-Adviser may, on occasions when it deems the purchase
or sale of a security to be in the best interests of the
Fund as well as other fiduciary or agency accounts managed
by the Sub-Adviser, aggregate, to the extent permitted by
applicable laws and regulations, the securities to be sold
or purchased in order to obtain the best overall terms
available and execution with respect to common and preferred
stocks and the best net price and execution with respect to
other securities. In such event, allocation of the
securities so purchased or sold, as well as the expenses
incurred in the transaction, will be made by the Sub-Adviser
in the manner it considers to be most fair and equitable
over time to the Fund and to its other accounts.
(g) The Sub-Adviser, in connection with its rights and duties
with respect to the Fund and the Trust shall use the care,
skill, prudence and diligence under the circumstances then
prevailing that a prudent person acting in a like capacity
and familiar with such matters would use in the conduct of
an enterprise of a like character and with like aims.
[MATERIAL REDACTED: CONFIDENTIAL TREATMENT REQUESTED].
(i) The Sub-Adviser shall furnish the Advisers and the
administrators of the Trust (together, the "Administrators")
weekly, monthly, quarterly and annual reports concerning
portfolio transactions and performance of the Sub-Advised
Assets as the Advisers may reasonably determine in such form
as may be mutually agreed upon, and agrees to review the
Sub-Advised Assets with the Advisers and discuss the
management of them. The Sub-Adviser shall promptly respond
to requests by the Advisers, the Administrators to the
Trust, and the Trust CCO or their delegates for copies of
the pertinent books and records maintained by the
Sub-Advisers relating directly to the Fund. The Sub-Adviser
shall also provide the Advisers with such other information
and reports, including information and reports related to
compliance matters, as may reasonably be requested by them
from time to time, including without limitation all material
requested by or required to be delivered to the Board.
(j) Unless otherwise instructed by the Advisers, the Sub-Adviser
shall not have the power, discretion or responsibility to
vote any proxies in connection with securities in which the
Sub-Advised Assets may be invested, and the Advisers shall
retain such responsibility.
(k) The Sub-Adviser shall cooperate promptly and fully with the
Advisers and/or the Trust in responding to any regulatory or
compliance examinations or inspections (including any
information requests) relating to the Trust, the Fund or
either of the Advisers brought by any governmental or
regulatory authorities. The Sub-Adviser shall provide to the
Trust CCO or his or her delegate notice of any deficiencies
that are identified by the United States Securities and
Exchange Commission ("SEC") in written correspondence to the
Sub-Adviser and that relate to the services provided by the
Sub-Adviser to the Fund pursuant to this Agreement. The
Sub-Adviser shall provide such notification within a
reasonable period after receiving the correspondence. The
Sub-Adviser shall provide additional information with
respect to such deficiencies as is reasonably requested by
the Trust CCO or his or her delegatee.
(l) The Sub-Adviser shall be responsible for the preparation and
filing of Schedule 13G and Form 13F on behalf of the
Sub-Advised Assets. The Sub-Adviser shall not be responsible
for the preparation or filing of any other reports required
on behalf of the Sub-Advised Assets, except as may be
expressly agreed to in writing.
(m) The Sub-Adviser shall maintain separate detailed records of
all matters pertaining to the Sub-Advised Assets, including,
without
limitation, brokerage and other records of all securities
transactions. Any records required to be maintained and
preserved pursuant to the provisions of Rule 31a-1 and Rule
31a-2 promulgated under the 1940 Act that are prepared or
maintained by the Sub-Adviser on behalf of the Trust are the
property of the Trust and will be surrendered promptly to
the Trust upon request. The Sub-Adviser further agrees to
preserve for the periods prescribed in Rule 31a-2 under the
1940 Act the records required to be maintained under Rule
31a-1 under the 1940 Act.
(n) The Sub-Adviser shall promptly notify the Advisers of any
financial condition that is likely to impair the
Sub-Adviser's ability to fulfill its commitments under this
Agreement.
(o) Sub-Adviser agrees to provide assistance to Advisor as
Advisor reasonably requests regarding lawsuits involving the
Fund or securities presently or formerly held in the Fund.
Adviser, however, shall be responsible for all such
lawsuits. In the case of notices of class action suits
received by Sub-Adviser involving issuers presently or
formerly held in the Fund, Sub-Adviser shall promptly
forward such notices to Adviser and may provide information
about the Fund to third parties for purposes of
participating in any settlements relating to such class
actions.
2. Representations and Warranties of the Parties.
(a) The Sub-Adviser represents and warrants to the Advisers as
follows:
(i) The Sub-Adviser is a registered investment adviser
under the Advisers Act;
(ii) The Form ADV that the Sub-Adviser has previously
provided to the Advisers is a true and complete copy of
the form as currently filed with the SEC, and the
information contained therein is accurate and complete
in all material respects and does not omit to state any
material fact necessary in order to make the statements
made, in light of the circumstances under which they
are made, not misleading. The Sub-Adviser will promptly
provide the Advisers and the Trust with a complete copy
of all subsequent amendments to its Form ADV;
(iii) The Sub-Adviser will carry at all times professional
errors and omissions liability insurance with carriers
approved by the Advisers covering services provided
hereunder by the Sub-Adviser in an appropriate amount,
which insurance
shall be primary to any insurance policy carried by the
Advisers;
(iv) The Sub-Adviser will furnish the Advisers with
certificates of insurance in forms and substance
reasonably acceptable to the Advisers evidencing the
coverages specified in paragraph 2(a)(iii) hereof and
will provide notice of termination of such coverages,
if any, to the Advisers and the Trust, all as promptly
as reasonably possible. The Sub-Adviser will notify the
Advisers promptly, and in any event within 10 business
days, when the Sub-Adviser receives notice of any
termination of the specified coverage; and
(v) This Agreement has been duly authorized and executed by
the Sub-Adviser.
(b) Each Adviser represents and warrants to the Sub-Adviser as
follows:
(i) Each Adviser is registered under the Advisers Act; and
(ii) Each Adviser and the Trust has duly authorized the
execution of this Agreement by the Advisers.
3. Obligations of the Advisers.
(a) The Advisers shall provide (or cause the Fund's Custodian
(as defined in Section 3 hereof) to provide) timely
information to the Sub-Adviser regarding such matters as the
composition of the Sub-Advised Assets, cash requirements and
cash available for investment in the Sub-Advised Assets, and
all other information as may be reasonably necessary for the
Sub-Adviser to perform its responsibilities hereunder.
(b) The Advisers have furnished the Sub-Adviser with a copy of
the prospectus and statement of additional information of
the Fund and they agree during the continuance of this
Agreement to furnish the Sub-Adviser copies of any revisions
or supplements thereto at, or, if practicable, before the
time the revisions or supplements become effective. The
Advisers agree to furnish the Sub-Adviser with copies of any
financial statements or reports made by the Fund to its
shareholders, and any further materials or information that
the Sub-Adviser may reasonably request to enable it to
perform its functions under this Agreement.
4. Custodian. The Advisers shall provide the Sub-Adviser with a copy of the
Fund's agreement with the custodian designated to hold the assets of the Fund
(the "Custodian") and any material modifications thereto (the "Custody
Agreement") that may affect the Sub-Adviser's
duties, copies of such modifications to be provided to the Sub-Adviser
reasonably in advance of the effectiveness of such modifications. The
Sub-Advised Assets shall be maintained in the custody of the Custodian
identified in, and in accordance with the terms and conditions of, the Custody
Agreement (or any sub-custodian properly appointed as provided in the Custody
Agreement). The Sub-Adviser shall have no liability for the acts or omissions of
the Custodian, unless such act or omission is taken solely in reliance upon
negligent or erroneous instruction given to the Custodian by a representative of
the Sub-Adviser properly authorized to give such instruction under the Custody
Agreement. Any assets added to the Fund shall be delivered directly to the
Custodian.
5. Use of Name. During the term of this Agreement, the Advisers shall have
permission to use the Sub-Adviser's name in the marketing of the Fund, and agree
to furnish the Sub-Adviser, for its prior approval (which approval shall not be
unreasonably withheld) at its principal office all prospectuses, proxy
statements and reports to shareholders prepared for distribution to shareholders
of the Fund or the public that refer to the Sub-Adviser in any way. If Advisers
do not receive a response from the Sub-Adviser with respect to such materials
within five business days of its submission for approval, such materials shall
be deemed accepted by the Sub-Adviser. The Sub-Adviser agrees that Advisers may
request that the Sub-Adviser approve use of a certain type, and that Advisers
need not provide for approval each additional piece of marketing material that
is of substantially the same type.
During the term of this Agreement, the Sub-Adviser shall not use the
Advisers' names or the Trust's name without the prior consent of the Advisers.
6. Expenses. During the Term of this Agreement, the Sub-Adviser will pay
all expenses incurred by it in connection with the performance of its duties
under paragraph 1 hereof other than the cost (including taxes, brokerage
commissions and other transaction costs, if any) of the securities or other
investment instruments purchased or sold for the Fund.
7. Compensation of the Sub-Adviser. As full compensation for all services
rendered, facilities furnished and expenses borne by the Sub-Adviser hereunder,
the Sub-Adviser shall be paid the fees in the amounts and in the manner set
forth in Appendix A hereto.
8. Independent Contractor Status. The Sub-Adviser shall for all purposes
hereof be deemed to be an independent contractor and shall, unless otherwise
provided or authorized, have no authority to act for or represent the Trust or
the Advisers in any way or otherwise be deemed an agent of the Fund or the
Advisers.
9. Liability and Indemnification.
(a) Liability. The duties of the Sub-Adviser shall be confined to
those expressly set forth herein with respect to the Sub-Advised
Assets. The Sub-Adviser shall not be liable for any loss arising
out of any portfolio investment or disposition hereunder, except
a loss resulting from willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of
reckless disregard of its obligations and duties hereunder. Under
no circumstances shall the Sub-Adviser be liable for any loss
arising out of any act or omission taken by another sub-adviser
in respect of any portion of the Trust's assets not managed by
the Sub-Adviser pursuant to this Agreement or any other third
party.
(b) Indemnification.
(i) The Sub-Adviser shall indemnify the Advisers, the Trust and
the Fund, and their respective affiliates and controlling
persons (the "Sub-Adviser Indemnified Persons") for any
liability and expenses, including reasonable attorneys'
fees, which the Advisers, the Trust or the Fund and their
respective affiliates and controlling persons may sustain as
a result of the Sub-Adviser's breach of this Agreement or
its representations and warranties herein or as a result of
the Sub-Adviser's willful misfeasance, bad faith, gross
negligence, or reckless disregard of its duties hereunder or
violation of applicable law; provided, however, that the
Adviser Indemnified Persons shall not be indemnified for any
liability or expenses that may be sustained as a result of
the either of the Advisers' breach of this Agreement or its
representations or warranties herein, willful misfeasance,
bad faith, gross negligence, or reckless disregard of their
duties hereunder.
(ii) Each Adviser shall indemnify the Sub-Adviser, its affiliates
and its controlling persons (the "Sub-Adviser Indemnified
Persons") for any liability and expenses, including
reasonable attorneys' fees, arising from, or in connection
with, such Adviser's breach of this Agreement or their
representations and warranties herein or as a result of such
Adviser's willful misfeasance, bad faith, gross negligence,
reckless disregard of their duties hereunder or violation of
applicable law; provided, however, that the Sub-Adviser
Indemnified Persons shall not be indemnified for any
liability or expenses that may be sustained as a result of
the Sub-Adviser's breach of this Agreement or its
representations or warranties herein, willful misfeasance,
bad faith, gross negligence, or reckless disregard of its
duties hereunder.
10. Effective Date and Termination. This Agreement shall become effective
as of the date of its execution, and:
(a) unless otherwise terminated, this Agreement shall continue in
effect until August 31, 2008, and from year to year thereafter so
long as such continuance is specifically approved at least
annually (i) by the Board or by vote of a majority of the
outstanding voting securities of the Fund, and (ii) by vote of a
majority of the Trustees of the Trust who are not interested
persons of the Trust, either of the Advisers or the Sub-Adviser,
cast in person at a meeting called for the purpose of voting on
such approval;
(b) this Agreement may at any time be terminated on 60 days' written
notice to the Sub-Adviser either by vote of the Board or by vote
of a majority of the outstanding voting securities of the Fund;
(c) this Agreement shall automatically terminate in the event of its
assignment as such term is defined in Section 2(a)(4) of the 1940
Act or upon the termination of the Advisory Agreement; and
(d) this Agreement may be terminated by the Sub-Adviser on 30 days'
written notice to the Advisers and the Trust, or by the Advisers
immediately upon notice to the Sub-Adviser.
Termination of this Agreement pursuant to this Section 10 shall be without
the payment of any penalty.
11. Amendment. This Agreement may be amended at any time by mutual consent
of the Advisers and the Sub-Adviser, provided that, if required by law, such
amendment shall also have been approved by vote of a majority of the outstanding
voting securities of the Fund and by vote of a majority of the Trustees of the
Trust who are not interested persons of the Trust, either of the Advisers, or
the Sub-Adviser, cast in person at a meeting called for the purpose of voting on
such approval.
12. Assignment. The Sub-Adviser may not assign this Agreement and this
Agreement shall automatically terminate in the event of an "assignment," as such
term is defined in Section 2(a)(4) of the 1940 Act. The Sub-Adviser shall notify
the Advisers in writing sufficiently in advance of any proposed change of
"control," as defined in Section 2(a)(9) of the 1940 Act, so as to enable the
Trust and/or the Advisers to: (a) consider whether an assignment will occur, (b)
consider whether to enter into a new Sub-Advisory Agreement with the
Sub-Adviser, and (c) prepare, file, and deliver any disclosure document to the
Fund's shareholders as may be required by applicable law.
13. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be construed in accordance with
applicable federal law and the laws of the State of Illinois and shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors (subject to paragraph 10 (c) hereof) and, to the extent
provided in paragraph 9 hereof, each Sub-Adviser and Advisers Indemnified
Person. Anything herein to the contrary notwithstanding, this Agreement shall
not be construed to require, or to impose any duty upon, either of the parties
to do anything in violation of any applicable laws or regulations. Any provision
in this Agreement requiring compliance with any statute or regulation shall mean
such statute or regulation as amended and in effect from time to time.
14. Regulation S-P. In accordance with Regulation S-P, if non-public
personal information regarding any party's customers or consumers is disclosed
to the other party in
connection with this Agreement, the other party receiving such information will
not disclose or use that information other than as necessary to carry out the
purposes of this Agreement.
15. Confidentiality. Any information or recommendations supplied by either
the Advisers or the Sub-Adviser, that are not otherwise in the public domain or
previously known to the other party in connection with the performance of its
obligations and duties hereunder, including without limitation portfolio
holdings of the Trust, financial information or other information relating to a
party to this Agreement, are to be regarded as confidential ("Confidential
Information") and held in the strictest confidence. Except as may be required by
applicable law or rule as requested by regulatory authorities having
jurisdiction over a party rule or as requested by regulatory authorities having
jurisdiction over a party to this Agreement, Confidential Information may be
used only by the party to which said information has been communicated and such
other persons as that party believes are necessary to carry out the purposes of
this Agreement, the Custodian, and such persons as the Advisers may designate in
connection with the Sub-Advised Assets.
16. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
This Agreement shall be governed by and interpreted in accordance with the
laws of the State of Illinois.
NORTHERN TRUST GLOBAL ADVISORS, INC.
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President
NORTHERN TRUST INVESTMENTS, N.A.
By: /s/ Xxxx Xxxxxxxxxx
---------------------------------
Name: Xxxx Xxxxxxxxxx
Title: Senior Vice President
COPPER ROCK CAPITAL PARTNERS, LLC
By: /s/ Xxxx Xxxxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Chief Operating Officer
Appendix A
Sub-Advisory Fees
As full compensation for the services and the expenses assumed by the
Sub-Adviser pursuant to this Agreement, the Advisers shall pay the Sub-Adviser a
fee at the annual rate of [Material Redacted: Confidential Treatment Requested].
Such compensation will be computed based on net assets on each day and will
be payable monthly in arrears.
NORTHERN FUNDS
SUB-ADVISORY AGREEMENT
MULTI-MANAGER INTERNATIONAL EQUITY FUND
Sub-Advisory Agreement (this "Agreement") entered into as of the 3rd
day of March, 2008, by and among Northern Trust Investments, N.A. and Northern
Trust Global Advisors, Inc. (together, the "Advisers"), and Xxxxxxx Xxxxx &
Company, LLC, a Delaware limited liability company (the "Sub-Adviser").
WHEREAS, the Advisers have entered into an Investment Advisory and
Ancillary Services Agreement dated May 5, 2006 (the "Advisory Agreement") with
Northern Funds (the "Trust"), relating to the provision of portfolio management
and administrative services to the Multi-Manager International Equity Fund (the
"Fund");
WHEREAS, the Advisory Agreement provides that the Advisers may
delegate any or all of their portfolio management responsibilities under the
Advisory Agreement to one or more sub-advisers;
WHEREAS, the Advisers and the Trustees of the Trust desire to retain
the Sub-Adviser to render portfolio management services to the Fund in the
manner and on the terms set forth in this Agreement, and the Sub-Adviser is
willing to provide such services.
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter set forth, the parties hereto agree as follows:
1. Sub-Advisory Services.
(a) The Advisers hereby appoint the Sub-Adviser to act as an
investment adviser to the Fund for the periods and on the terms
herein set forth. The Sub-Adviser accepts such appointment and
agrees to render the services herein set forth, for the
compensation herein provided.
(b) The Sub-Adviser shall, subject to the supervision and oversight
of the Advisers, manage the investment and reinvestment of such
portion of the assets of the Fund, as the Advisers may from time
to time allocate to the Sub-Adviser for management (the
"Sub-Advised Assets"). The Sub-Adviser shall manage the
Sub-Advised Assets in conformity with (i) the investment
objective, policies and restrictions of the Fund set forth in the
Trust's prospectus and statement of additional information
relating to the Fund, as they may be amended from time to time,
any additional policies or guidelines, including without
limitation compliance policies and procedures, established by the
Advisers, the Trust's Chief Compliance
Officer, or by the Trust's Board of Trustees ("Board") that have
been furnished in writing to the Sub-Adviser, (ii) the asset
diversification tests applicable to regulated investment
companies pursuant to section 851(b)(3) of the Internal Revenue
Code, (iii) the written instructions and directions received from
the Advisers and the Trust as delivered; and (iv) the
requirements of the Investment Company Act of 1940 (the "1940
Act"), the Investment Advisers Act of 1940 ("Advisers Act"), and
all other federal and state laws applicable to registered
investment companies and the Sub-Adviser's duties under this
Agreement, all as may be in effect from time to time. The
foregoing are referred to below together as the "Policies."
For purposes of compliance with the Policies, the Sub-Adviser
shall be entitled to treat the Sub-Advised Assets as though the
Sub-Advised Assets constituted the entire Fund, and the
Sub-Adviser shall not be responsible in any way for the
compliance of any assets of the Fund, other than the Sub-Advised
Assets, with the Policies. Subject to the foregoing, the
Sub-Adviser is authorized, in its discretion and without prior
consultation with the Advisers, to buy, sell, lend and otherwise
trade in any stocks, bonds and other securities and investment
instruments on behalf of the Fund, without regard to the length
of time the securities have been held and the resulting rate of
portfolio turnover or any tax considerations; and the majority or
the whole of the Sub-Advised Assets may be invested in such
proportions of stocks, bonds, other securities or investment
instruments, or cash, as the Sub-Adviser shall determine.
Notwithstanding the foregoing provisions of this Section 1(b),
however, (i) the Sub-Adviser shall, upon and in accordance with
written instructions from either of the Advisers, effect such
portfolio transactions for the Sub-Advised Assets as the Adviser
shall determine are necessary in order for the Fund to comply
with the Policies, and (ii) upon notice to the Sub-Adviser, the
Advisers may effect in-kind redemptions with shareholders of the
Fund with securities included within the Sub-Advised Assets.
(c) Absent instructions from the Advisers or the officers of the
Trust to the contrary, the Sub-Adviser shall place orders
pursuant to its determinations either directly with the issuer or
with any broker and/or dealer or other person who deals in the
securities in which the Fund is trading. With respect to common
and preferred stocks, in executing portfolio transactions and
selecting brokers or dealers, the Sub-Adviser shall use its best
judgment to obtain the best overall terms available. In assessing
the best overall terms available for any transaction, the
Sub-Adviser shall consider all factors it deems relevant,
including the breadth of the market in the security, the price of
the security, the financial condition and execution capability of
the broker or dealer, and the reasonableness of the commission,
if any, both for the specific transaction and on a continuing
basis. In evaluating the best overall terms available and in
selecting the
broker or dealer to execute a particular transaction, the
Sub-Adviser may also consider the brokerage and research services
(as those terms are defined in Section 28(e) of the Securities
Exchange Act of 1934) provided to the Fund and/or other account
over which the Sub-Adviser and/or an affiliate of the Sub-Adviser
exercises investment discretion. With respect to securities other
than common and preferred stocks, in placing orders with brokers,
dealers or other persons, the Sub-Adviser shall attempt to obtain
the best net price and execution of its orders, provided that to
the extent the execution and price available from more than one
broker, dealer or other such person are believed to be
comparable, the Sub-Adviser may, at its discretion but subject to
applicable law, select the executing broker, dealer or such other
person on the basis of the Sub-Adviser's opinion of the
reliability and quality of such broker, dealer or such other
person; broker or dealers selected by the Sub-Adviser for the
purchase and sale of securities or other investment instruments
for the Sub-Advised Assets may include brokers or dealers
affiliated with the Sub-Adviser, provided such orders comply with
Rules 17e-1 and l0f-3 under the 1940 Act and the Trust's Rule
17e-1 and Rule l0f-3 Procedures, respectively, in all respects or
any other applicable exemptive rules or orders applicable to the
Sub-Adviser. Notwithstanding the foregoing, the Sub-Adviser will
not effect any transaction with a broker or dealer that is an
"affiliated person" (as defined under the 1940 Act) of the
Sub-Adviser or the Advisers without the prior approval of the
Advisers. The Advisers shall provide the Sub-Adviser with a list
of brokers or dealers that are affiliated persons of the
Advisers.
(d) The Sub-Adviser acknowledges that the Advisers and the Trust may
rely on Rules 17a-7, 17a-l0, l0f-3 and 17e-1 under the 1940 Act,
and the Sub-Adviser hereby agrees that it shall not consult with
any other investment adviser to the Trust with respect to
transactions in securities for the Sub-Advised Assets or any
other transactions in the Trust's assets, other than for the
purposes of complying with the conditions of paragraphs (a) and
(b) of Rule 12d3-1 under the 1940 Act.
(e) The Sub-Adviser has provided the Advisers with a true and
complete copy of its compliance policies and procedures for
compliance with "federal securities laws" (as such term is
defined under Rule 38a-1 of the 1940 Act) and Rule 206(4)-7 of
the Advisers Act (the "Sub-Adviser Compliance Policies"). The
Sub-Adviser's chief compliance officer ("Sub-Adviser CCO") shall
provide to the Trust's Chief Compliance Officer ("Trust CCO") or
his or her delegatee promptly (and in no event more than 10
business days) the following:
(i) a report of any material changes to the Sub-Adviser
Compliance Policies;
(ii) a report of any "material compliance matters," as defined by
Rule 38a-l under the 1940 Act, that have occurred in
connection with the Sub-Adviser Compliance Policies;
(iii) a copy of the Sub-Adviser CCO's report with respect to the
annual review of the Sub-Adviser Compliance Policies
pursuant to Rule 206(4)-7 under the Advisers Act; and
(iv) an annual (or more frequently as the Trust CCO may request)
certification regarding the Sub-Adviser's compliance with
Rule 206(4)-7 under the Advisers Act and Section 38a-1 of
the 1940 Act as well as the foregoing sub-paragraphs (i) -
(iii).
(f) The Sub-Adviser may, on occasions when it deems the purchase or
sale of a security to be in the best interests of the Fund as
well as other fiduciary or agency accounts managed by the
Sub-Adviser, aggregate, to the extent permitted by applicable
laws and regulations, the securities to be sold or purchased in
order to obtain the best overall terms available and execution
with respect to common and preferred stocks and the best net
price and execution with respect to other securities. In such
event, allocation of the securities so purchased or sold, as well
as the expenses incurred in the transaction, will be made by the
Sub-Adviser in the manner it considers to be most fair and
equitable over time to the Fund and to its other accounts.
(g) The Sub-Adviser, in connection with its rights and duties with
respect to the Fund and the Trust shall use the care, skill,
prudence and diligence under the circumstances then prevailing
that a prudent person acting in a like capacity and familiar with
such matters would use in the conduct of an enterprise of a like
character and with like aims.
(h) The services of the Sub-Adviser hereunder are not deemed
exclusive and the Sub-Adviser shall be free to render similar
services to others (including other investment companies) so long
as its services under this Agreement are not impaired thereby.
The Sub-Adviser will waive enforcement of any non-compete
agreement or other agreement or arrangement to which it is
currently a party that restricts, limits, or otherwise interferes
with the ability of the Advisers to employ or engage any person
or entity to provide investment advisory or other services and
will transmit to any person or entity notice of such waiver as
may be required to give effect to this provision; and the
Sub-Adviser will not become a party to any non-compete agreement
or any other agreement, arrangement, or understanding that would
restrict, limit, or otherwise interfere with the ability of the
Advisers and the Trust or any of their affiliates to employ or
engage any person or organization, now or in the future, to
manage the Fund or any other assets managed by the Advisers.
(i) The Sub-Adviser shall furnish the Advisers and the administrators
of the Trust (together, the "Administrators") weekly, monthly,
quarterly and annual reports concerning portfolio transactions
and performance of the Sub-Advised Assets as the Advisers may
reasonably determine in such form as may be mutually agreed upon,
and agrees to review the Sub-Advised Assets with the Advisers and
discuss the management of them. The Sub-Adviser shall promptly
respond to requests by the Advisers, the Administrators to the
Trust, and the Trust CCO or their delegatees for copies of the
pertinent books and records maintained by the Sub-Advisers
relating directly to the Fund. The Sub-Adviser shall also provide
the Advisers with such other information and reports, including
information and reports related to compliance matters, as may
reasonably be requested by them from time to time, including
without limitation all material requested by or required to be
delivered to the Board.
(j) Unless otherwise instructed by the Advisers, the Sub-Adviser
shall not have the power, discretion or responsibility to vote
any proxies in connection with securities in which the
Sub-Advised Assets may be invested, and the Advisers shall retain
such responsibility.
(k) The Sub-Adviser shall cooperate promptly and fully with the
Advisers and/or the Trust in responding to any regulatory or
compliance examinations or inspections (including any information
requests) relating to the Trust, the Fund or either of the
Advisers brought by any governmental or regulatory authorities.
The Sub-Adviser shall provide the Trust CCO or his or her
delegatee with notice within a reasonable period of any
deficiencies or other issues identified by the United States
Securities and Exchange Commission ("SEC") in an examination or
otherwise that relate to or that may affect the Sub-Adviser's
responsibilities with respect to the Fund.
(l) The Sub-Adviser shall be responsible for the preparation and
filing of Schedule 13G and Form 13F on behalf of the Sub-Advised
Assets. The Sub-Adviser shall not be responsible for the
preparation or filing of any other reports required on behalf of
the Sub-Advised Assets, except as may be expressly agreed to in
writing.
(m) The Sub-Adviser shall maintain separate detailed records of all
matters pertaining to the Sub-Advised Assets, including, without
limitation, brokerage and other records of all securities
transactions. Any records required to be maintained and preserved
pursuant to the provisions of Rule 31a-1 and Rule 31a-2
promulgated under the 1940 Act that are prepared or maintained by
the Sub-Adviser on behalf of the Trust are the property of the
Trust and will be surrendered promptly to the Trust upon request.
The Sub-Adviser further agrees to preserve for the periods
prescribed in Rule
31a-2 under the 1940 Act the records required to be maintained
under Rule 31a-1 under the 1940 Act.
(n) The Sub-Adviser shall promptly notify the Advisers of any
financial condition that is likely to impair the Sub-Adviser's
ability to fulfill its commitments under this Agreement.
2. Representations and Warranties of the Parties.
(a) The Sub-Adviser represents and warrants to the Advisers as
follows:
(i) The Sub-Adviser is a registered investment adviser under the
Advisers Act;
(ii) The Form ADV that the Sub-Adviser has previously provided to
the Advisers is a true and complete copy of the form as
currently filed with the SEC, and the information contained
therein is accurate and complete in all material respects
and does not omit to state any material fact necessary in
order to make the statements made, in light of the
circumstances under which they are made, not misleading. The
Sub-Adviser will promptly provide the Advisers and the Trust
with a complete copy of all subsequent amendments to its
Form ADV;
(iii) The Sub-Adviser will carry at all times, and with companies
rated by A.M. Best Company with at least an A-VII rating, or
its equivalent, professional errors and omissions liability
insurance covering services provided hereunder by the
Sub-Adviser in an appropriate amount, which insurance shall
be primary to any insurance policy carried by the Advisers;
(iv) The Sub-Adviser will furnish the Advisers with certificates
of insurance in forms and substance reasonably acceptable to
the Advisers evidencing the coverages specified in paragraph
2(a)(iii) hereof and will provide notice of termination of
such coverages, if any, to the Advisers and the Trust, all
as promptly as reasonably possible. The Sub-Adviser will
notify the Advisers promptly, and in any event within 10
business days, when the Sub-Adviser receives notice of any
termination of the specified coverage; and
(v) This Agreement has been duly authorized and executed by the
Sub-Adviser.
(b) Each Adviser represents and warrants to the Sub-Adviser as
follows:
(i) Each Adviser is registered under the Advisers Act; and
(ii) Each Adviser and the Trust has duly authorized the execution
of this Agreement by the Advisers.
3. Obligations of the Advisers.
(a) The Advisers shall provide (or cause the Fund's Custodian (as
defined in Section 3 hereof) to provide) timely information to
the Sub-Adviser regarding such matters as the composition of the
Sub-Advised Assets, cash requirements and cash available for
investment in the Sub-Advised Assets, and all other information
as may be reasonably necessary for the Sub-Adviser to perform its
responsibilities hereunder.
(b) The Advisers have furnished the Sub-Adviser with a copy of the
prospectus and statement of additional information of the Fund
and they agree during the continuance of this Agreement to
furnish the Sub-Adviser copies of any revisions or supplements
thereto at, or, if practicable, before the time the revisions or
supplements become effective. The Advisers agree to furnish the
Sub-Adviser with copies of any financial statements or reports
made by the Fund to its shareholders, and any further materials
or information that the Sub-Adviser may reasonably request to
enable it to perform its functions under this Agreement.
4. Custodian. The Advisers shall provide the Sub-Adviser with a copy of the
Fund's agreement with the custodian designated to hold the assets of the
Fund (the "Custodian") and any material modifications thereto (the "Custody
Agreement") that may affect the Sub-Adviser's duties, copies of such
modifications to be provided to the Sub-Adviser reasonably in advance of
the effectiveness of such modifications. The Sub-Advised Assets shall be
maintained in the custody of the Custodian identified in, and in accordance
with the terms and conditions of, the Custody Agreement (or any
sub-custodian properly appointed as provided in the Custody Agreement). The
Sub-Adviser shall have no liability for the acts or omissions of the
Custodian, unless such act or omission is taken solely in reliance upon
instruction given to the Custodian by a representative of the Sub-Adviser
properly authorized to give such instruction under the Custody Agreement.
Any assets added to the Fund shall be delivered directly to the Custodian.
5. Use of Name. During the term of this Agreement, the Advisers shall have
permission to use the Sub-Adviser's name in the marketing of the Fund, and
agree to furnish the Sub-Adviser, for its prior approval (which approval
shall not be unreasonably withheld) at its principal office all
prospectuses, proxy statements and reports to shareholders prepared for
distribution to shareholders of the Fund or the public that refer to the
Sub-Adviser in any way. If Advisers do not receive a response from the
Sub-Adviser with respect to such materials within five business days of its
submission for approval, such materials shall be deemed accepted by the
Sub-Adviser. The Sub-Adviser agrees that Advisers may request that the
Sub-Adviser approve use of a certain type, and
that Advisers need not provide for approval each additional piece of
marketing material that is of substantially the same type.
During the term of this Agreement, the Sub-Adviser shall not use the
Advisers' names or the Trust's name without the prior consent of the
Advisers.
6. Expenses. During the Term of this Agreement, the Sub-Adviser will pay
all expenses incurred by it in connection with the performance of its
duties under paragraph I hereof other than the cost (including taxes,
brokerage commissions and other transaction costs, if any) of the
securities or other investment instruments purchased or sold for the Fund.
7. Compensation of the Sub-Adviser. As full compensation for all services
rendered, facilities furnished and expenses borne by the Sub-Adviser
hereunder, the Sub-Adviser shall be paid the fees in the amounts and in the
manner set forth in Appendix A hereto.
8. Independent Contractor Status. The Sub-Adviser shall for all purposes
hereof be deemed to be an independent contractor and shall, unless
otherwise provided or authorized, have no authority to act for or represent
the Trust or the Advisers in any way or otherwise be deemed an agent of the
Fund or the Advisers.
9. Liability and Indemnification.
(a) Liability. The duties of the Sub-Adviser shall be confined to
those expressly set forth herein with respect to the Sub-Advised
Assets. The Sub-Adviser shall not be liable for any loss arising
out of any portfolio investment or disposition hereunder, except
a loss resulting from willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of
reckless disregard of its obligations and duties hereunder. Under
no circumstances shall the Sub-Adviser be liable for any loss
arising out of any act or omission taken by another sub-adviser,
or any other third party, in respect of any portion of the
Trust's assets not managed by the Sub-Adviser pursuant to this
Agreement.
(b) Indemnification.
(i) The Sub-Adviser shall indemnify the Advisers, the Trust and
the Fund, and their respective affiliates and controlling
persons (the "Adviser Indemnified Persons") for any
liability and expenses, including reasonable attorneys'
fees, which the Advisers, the Trust or the Fund and their
respective affiliates and controlling persons may sustain as
a result of the Sub-Adviser's breach of this Agreement or
its representations and warranties herein or as a result of
the Sub-Adviser's willful misfeasance, bad faith, gross
negligence, or reckless disregard of its duties hereunder or
violation of applicable law; provided, however, that the
Adviser
Indemnified Persons shall not be indemnified for any
liability or expenses that may be sustained as a result of
the either of the Advisers' willful misfeasance, bad faith,
gross negligence, or reckless disregard of their duties
hereunder.
(ii) Each Adviser shall indemnify the Sub-Adviser, its affiliates
and its controlling persons (the "Sub-Adviser Indemnified
Persons") for any liability and expenses, including
reasonable attorneys' fees, arising from, or in connection
with, such Adviser's breach of this Agreement or their
representations and warranties herein or as a result of such
Adviser's willful misfeasance, bad faith, gross negligence,
reckless disregard of their duties hereunder or violation of
applicable law; provided, however, that the Sub-Adviser
Indemnified Persons shall not be indemnified for any
liability or expenses that may be sustained as a result of
the Sub-Adviser's willful misfeasance, bad faith, gross
negligence, or reckless disregard of its duties hereunder.
10. Effective Date and Termination. This Agreement shall become effective
as of the date of its execution, and:
(a) unless otherwise terminated, this Agreement shall continue in
effect until August 31, 2009, and from year to year thereafter so
long as such continuance is specifically approved at least
annually (i) by the Board or by vote of a majority of the
outstanding voting securities of the Fund, and (ii) by vote of a
majority of the Trustees of the Trust who are not interested
persons of the Trust, either of the Advisers or the Sub-Adviser,
cast in person at a meeting called for the purpose of voting on
such approval;
(b) this Agreement may at any time be terminated on 60 days' written
notice to the Sub-Adviser either by vote of the Board or by vote
of a majority of the outstanding voting securities of the Fund;
(c) this Agreement shall automatically terminate in the event of its
assignment or upon the termination of the Advisory Agreement; and
(d) this Agreement may be terminated by the Sub-Adviser on 30 days'
written notice to the Advisers and the Trust, or by the Advisers
immediately upon notice to the Sub-Adviser.
Termination of this Agreement pursuant to this Section 10 shall be
without the payment of any penalty.
11. Amendment. This Agreement may be amended at any time by mutual consent
of the Advisers and the Sub-Adviser, provided that, if required by law,
such amendment
shall also have been approved by vote of a majority of the outstanding
voting securities of the Fund and by vote of a majority of the Trustees of
the Trust who are not interested persons of the Trust, either of the
Advisers, or the Sub-Adviser, cast in person at a meeting called for the
purpose of voting on such approval.
12. Assignment. The Sub-Adviser may not assign this Agreement and this
Agreement shall automatically terminate in the event of an "assignment," as
such term is defined in Section 2(a)(4) of the 1940 Act. The Sub-Adviser
shall notify the Advisers in writing sufficiently in advance of any
proposed change of "control," as defined in Section 2(a)(9) of the 1940
Act, so as to enable the Trust and/or the Advisers to: (a) consider whether
an assignment will occur, (b) consider whether to enter into a new
Sub-Advisory Agreement with the Sub-Adviser, and (c) prepare, file, and
deliver any disclosure document to the Fund's shareholders as may be
required by applicable law.
13. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall
not be affected thereby. This Agreement shall be construed in accordance
with applicable federal law and the laws of the State of Illinois and shall
be binding upon and shall inure to the benefit of the parties hereto and
their respective successors (subject to paragraph 10 (c) hereof) and, to
the extent provided in paragraph 9 hereof, each Sub-Adviser and Advisers
Indemnified Person. Anything herein to the contrary notwithstanding, this
Agreement shall not be construed to require, or to impose any duty upon,
either of the parties to do anything in violation of any applicable laws or
regulations. Any provision in this Agreement requiring compliance with any
statute or regulation shall mean such statute or regulation as amended and
in effect from time to time.
14. Regulation S-P. In accordance with Regulation S-P, if non-public
personal information regarding any party's customers or consumers is
disclosed to the other party in connection with this Agreement, the other
party receiving such information will not disclose or use that information
other than as necessary to carry out the purposes of this Agreement.
15. Confidentiality. Any information or recommendations supplied by either
the Advisers or the Sub-Adviser, that are not otherwise in the public
domain or previously known to the other party in connection with the
performance of its obligations and duties hereunder, including without
limitation portfolio holdings of the Trust, financial information or other
information relating to a party to this Agreement, are to be regarded as
confidential ("Confidential Information") and held in the strictest
confidence. Except as may be required by applicable law or rule as
requested by regulatory authorities having jurisdiction over a party rule
or as requested by regulatory authorities having jurisdiction over a party
to this Agreement, Confidential Information may be used only by the party
to which said information has been communicated and such other persons as
that party
believes are necessary to carry out the purposes of this Agreement, the
Custodian, and such persons as the Advisers may designate in connection
with the Sub-Advised Assets.
16. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
This Agreement shall be governed by and interpreted in accordance with
the laws of the State of Illinois.
NORTHERN TRUST GLOBAL ADVISORS, INC.
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
NORTHERN TRUST INVESTMENTS, N.A.
By: /s/ Xxxx X. Xxxxxxxxxx
---------------------------------
Name: Xxxx X. Xxxxxxxxxx
Title: Senior Vice President
XXXXXXX XXXXX & COMPANY, LLC
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Compliance Officer
APPENDIX A
SUB-ADVISORY FEES
As full compensation for the services and the expenses assumed by the
Sub-Adviser pursuant to this Agreement, the Advisers shall pay the Sub-Adviser a
fee at the annual rate of [Material Redacted: Confidential Treatment Requested].
Such compensation will be computed based on net assets on each day and will
be payable monthly in arrears.
